WeWork India share price zooms 8% as Jefferies initiates coverage with 'buy' tag; bull case scenario signals 45% upside

WeWork India share price surged by nearly 8% during Tuesday's trading session after global brokerage Jefferies initiated coverage on the company with a 'Buy' recommendation, setting a price target of ₹790, which indicates a 29% upside compared to the stock's previous closing price.

According to the brokerage, WeWork India holds the position of the largest flexible workspace provider in India by revenue. Given that the flexible workspace sector is expanding at a 17% CAGR, nearly double the growth rate of traditional office spaces, Jefferies is optimistic about the potential for further market penetration.

Jefferies projects that WeWork India's revenue will increase at a 22% compound annual growth rate (CAGR) from FY25 to FY28, while EBITDA is anticipated to rise even more rapidly at a 28% annual growth rate during the same timeframe.

According to a report by Jefferies, their base case anticipates that WeWork India will achieve a revenue CAGR of 20% and an EBITDA CAGR of 22% during FY25–28E, fueled by robust demand for flexible workspaces, elevated pricing, and operational efficiencies. Their projected price target, based on a 15x Sep'27E EV/EBITDA, stands at ₹790.

Additionally, the brokerage outlined a positive outlook by noting that quicker adoption of flexible workspaces, improved occupancy rates, and stronger average revenue per member (ARPM) growth could result in increased margins and cash flow. These factors could potentially elevate WeWork India’s stock price to ₹895.

In contrast, the brokerage warned that a significant decline in office demand, slower seating expansions, or heightened competition could cause a dip in occupancy and reduced pricing. In this case, WeWork India’s stock might drop to ₹650.

WeWork India IPO

WeWork India debuted on the NSE and BSE on October 10. The IPO was exclusively an offer for sale (OFS), which means the company did not gain any funds from the listing.

Promoter Embassy Buildcon LLP, along with existing investor Ariel Way Tenant Ltd., which is a subsidiary of WeWork International, sold shares in the IPO. In a negative scenario, the brokerage indicated that a significant decline in office demand, slower additions of seats, or heightened competition could result in lower occupancy rates and reduced pricing. In this case, WeWork India's stock might drop to ₹650.

WeWork India share price

WeWork India share price today opened at ₹652.40 apiece on the BSE, the stock touched an intraday high of ₹661.95 per share, and an intraday low of ₹637.65 per share.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.